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Custody Service for QFLP

I. Product Overview
QFLP system (Qualified Foreign Limited Partner system) is another important move adopted by the Chinese Government, following the introduction of QFII system, to liberalize tier-1 market for foreign institutional investors, indicating that China is gradually releasing the strict restrictions on the access of foreign capital into China, hence it can be regarded as another pilot breakthrough in terms of existing foreign exchange control system in China. QFLP system was first implemented on a trial basis in the cities including Beijing, Shanghai and Chongqing. The competent department accepting application would approve certain quota for foreign-invested equity investment institutions, as the case may be. On January 12, 2011, the Implementation Measures for Carrying out the Pilot on Foreign-invested Equity Investment Enterprises in Shanghai was released, marking the formal commencement of QFLP system pilot in Shanghai. The Measures specify that qualified foreign limited partners should entrust a domestic commercial bank as their custodians to manage their assets.

II. Target Customers
According to existing QFLP regulations, the QFLP custody services of ICBC mainly target at: foreign sovereign funds, pension funds, endowment funds, charity funds, FOF (fund of investment fund), insurance companies, banks, securities companies and other approved foreign institutional investors.

III. Scope of Services
1. Account opening: open fund account, securities account and other relevant accounts for QFLP customers in accordance with requirement of the regulators;
2. Asset custody: set independent accounts for different QFLPs, keep the account independently, make sure the account balance match with vouchers, and guarantee the integrity and independence of fund assets;
3. Fund transfer: timely handle clearing and delivery of fund assets in accordance with investment instructions issued by fund managers;
4. Investment supervision: supervise whether instructions and investment operations of the fund managers are compliant according to laws/regulations and requirements of the customers;
5. Accounting: carry out fund accounting, check and review net asset value of fund assets calculated by the fund managers;
6. Custody report: provide fund custody and accounting reports to the fund investors and regulators on a regular basis;
7. Record keeping: keep record, accounts, statements and other materials relevant to the QFLP' custody business for at least 15 years in accordance with the government regulations.

IV. Advantages
As the largest custodian bank in China, ICBC has maintained its leading position in the market for 18 consecutive years in terms of market share of asset custody business.
It is also the most professional custodian bank in China, with an advanced custody service system independently developed by it. The system has obtained ISAE3402 authentication (formerly known as SAS70), the first one of its kind in China, indicating that ICBC’s custody services have met international standards.
ICBC, the most powerful domestic commercial bank, owns a fast clearing network, abundant RMB funds and strong A share settlement capability, hence it can provide QFLP customers with efficient and comprehensive service support.

V. Flow Chart

VI. Contact Information
If you would like to apply for any service, please contact the Global Asset Custody Division of Asset Custody Department of ICBC:
Liaison: Jia Wenhui, Chang Yue, Fan Mei, Feng Peini, Sun Yang, Wang Qiu, Wang Zhongwei
Tel.: (8610)66105757/5756/5700/5753/5754/5755/81013751
Fax: (8610)66105753
E-MAIL: wenhui.jia@icbc.com.cn